Inequality and the Rise of the Antifree

In the aftermath of the Great Recession and Occupy Wall Street, it’s hard to ignore the role that inequality plays in the creative ecosystem. As many continue to bemoan the pitiful state of remuneration for creative pursuits (documented, for instance, in the admittedly limited ALCS author earnings survey), should we be asking whether there’s enough money in the enterprise, or should we more concerned about where the money already in the system is going? Put another way, are the current problems with author remuneration to blame on the total size of the market, or on how and where existing returns are distributed?

I don’t mean to create a false dichotomy—obviously, one could easily answer “both!”—but my feeling is that taking the time to apportion responsibility has a great deal of relevance to what our policy prescriptions should be (assuming, of course, that author remuneration is your primary policy concern). My tentative hypothesis is that, by assuming the problem of author remuneration is primarily one of total market size, too many well-intentioned individuals turn to copyright-based solutions (extending term lengths, “notice and staydown,” etc, etc.) for what, at core, has not traditionally been a copyright problem.

Quite some time ago now, the editors at n+1 did a great job of capturing the spirit of current backlash against the current state of affairs in “The Free and the Antifree.” The authors trace the rise of “the free”—that is, ostensibly, the free culture movement—and the subsequent appearance of its antithesis, the “antifree.” In this dialectic, the free culture movement brought about crisis by undermining writers’ abilities to get paid. n+1 is chiming in as a voice of the “antifree,” what they’re calling those who want to see culture-making be a paid activity. They write:

In the argument between the free and the antifree, we’re with the antifree. Across a whole range of issues, a simple defense of intellectual property is right now a rebuke to the corporations, not a sop to them. “Show me the money” is a necessary slogan at a time when giant firms leverage a million retirement accounts for a split-second gain in the ominously named dark pools of the financial world.

(emphasis added.) This argument elides the important distinction between the existence/strength of intellectual property rights and the mechanics of being paid.

For better or for worse, the copyright approach to author remuneration is primarily laissez-faire.[1] The right to exclude others from your work makes it possible for you to reap the returns the work receives on the market. And so it turns out that, if the prospect of unrewarded labor is what concerns you, copyright is a particularly perverse system to which to turn. Copyright never guaranteed a wage, it merely provided a point of entry into a market.

And exclusivity (read: “copyright”) does not create demand and markets aren’t just. Commercial success is a poor proxy for impact, significance, or quality. If we were to reckon success by dollars, we’d find that most cultural output is loss, not worth the energy expended on it and this would be true regardless of the porousness of the prevailing copyright regime. By one 2007 estimate, seven out of eight traditionally published books are losers.

And of those works that become winners, it’s hard to divine any particular sense of deservedness. Putting aside his own copyright issues, Robin Thicke became a best-selling songwriter—moving more than 15 million copies of his single “Blurred Lines” and topping the charts in more than a dozen countries—after having the good fortune to be high in a recording studio with Pharrell Williams.

One thing we know for sure is that, whatever the state of author remuneration generally, today’s winners are winning bigger than ever before. James Patterson (with the help of his team), apparently, accounts for one out of every seventeen hardcover books sold in the United States, and Forbes has his annual earnings regularly approaching $100 million. If you add in the sales of other megahits, there isn’t much of a market left for those titles are that aren’t blockbusters.

There are plenty of reasons why we would expect to see extraordinary successes in the present market for cultural goods. First and foremost, that’s increasingly how businesses structure their activity—just ask Anita Elberse, who makes a compelling case for why the blockbuster model is just smart business.

Beyond that, a globalized cultural economy has greatly extended the horizon for successes. Hollywood now makes some 70% of its revenue from international markets. And mass culture makes for big returns: low (and still dropping) marginal costs of production means that, once a firm’s initial investment in production is paid off, an enviable amount of any given sale manifests as profit. The larger the potential market, the greater the capacity of the firm to make the most of these tremendous margins.

Even Taylor Swift, who was again in the headlines for shaming Apple into paying artists during the free trial period of its new music service, knows she doesn’t need help, writing that, “This is not about me. Thankfully I am on my fifth album and can support myself, my band, crew, and entire management team by playing live shows. This is about the new artist or band that has just released their first single and will not be paid for its success.” Sadly, she’s among the smallest handful of the one percent of artists for whom three months of streaming royalties from a single service would actually mean real money—while she’s right that Apple should have been paying those royalties, her hypothetical “new artist” would have to be extraordinarily lucky to get a sandwich out of the added income.

Looking back on the markets of yesteryear, it can seem like our system of cultural production superficially resembled something that seemed fair enough to labor. When the system worked best, remuneration-wise, it essentially did so using intermediaries as venture capitalists. Publishers, labels, and studios pooled risky investments in works of authorship in order to profit from the blockbuster success of a just a few titles. Chances were always high that your book/album/film would be a commercial dud, but you could still be bankrolled on the substantial earnings of one of your peers.

Now, this doesn’t mean that 20th century cultural production was utopic. Intermediaries wouldn’t invest in everything under the sun and there’s no doubt that, by serving as gatekeepers, they snuffed out the worthy hopes of many talented, hardworking creators. And while it’s possible that the firms involved have since gotten more hard-nosed, potential commercial prospects have always been the most important determinant of up-front remuneration. Such is business.

Perhaps the lesson here is that, absent the real support of institutional intermediaries, markets for copyrighted goods don’t provide the financial foundation most creators need to ply their craft. At least, they didn’t seem to in the pre-digital age, and they most certainly don’t now. As authorship becomes increasingly disintermediated, creators are made to hitch their wagons to their own stars, which, as we’ve seen, most often plummet straight back to earth. This isn’t just happening with creative professions, either: in the post-recession world, making ends meet without institutional support is the new normal. Welcome to the Gig Economy.

This last point raises an important question: is what’s happening to authors terribly different to what’s happening to the rest of the world? Looking at book publishing, the story sure seems awfully familiar. Industry employment is down and production rests on backs of contractors from the precariat, while industry profits are up and the 1% are realizing unprecedented returns. As a millennial, that sounds like business as normal regardless of the industry. No wonder our cultural economy is plagued by inequality and financial instability when the rest of our economy is as well.

All of which is a convoluted and overly wordy way of saying that most proposals for expanded/strengthened copyright[2] are unlikely to do much to remedy the reality of author remuneration for most people. We should know better by now than to think that a rising tide lifts all boats—peripheral expansions of copyright might increase the bottom lines of the lottery winners already astride the world, but they’re hardly likely to make a difference for those authors whose plights are most often invoked in debates about intellectual property. For them, we need support that isn’t completely tethered to the market, institutions that have a mission beyond profit, and collaboration between authors. We need a system that resists providing outsized rewards to a select few in order to better support the creative labors of many. That might be a tall order, but who ever said change was easy?

[1] I think it’s fair to say that the core of the regime envisioned by U.S. copyright law is market-driven, but certainly not all facets of the law are so easily explained—Section 203 comes to mind. On this score, look for forthcoming work from Berkeley Law’s current Microsoft Fellow Kevin Hickey that promises to unpack some of Copyright’s more paternalistic turns.

[2] Now, not all proposals here are created equal. For instance, many would like to see terrestrial radio play royalties to owners of sound recording rights the way they presently pay owners of music composition rights. In many respects the present, bewildering situation here is an historical accident, and it seems fairly straightforward to most people that radio play is something for which recording artists deserve compensation. No argument here.